Most Canadians do not have as much life and health insurance as they feel they need, a recent survey by BMO Life Assurance Co. (BMO Insurance) suggests.

In a survey of 1,002 Canadians aged 18 years and over conducted by Pollara in late October, respondents said they feel they need an average of $265,607 of life insurance coverage to ensure their dependents are supported financially, and to cover funeral expenses and debts.

However, statistics show that the average Canadian does not have that much coverage. According to the latest ownership data from the Canadian Life and Health Insurance Association (CLHIA), more than 21 million Canadians owned life insurance at the end of 2013, with average coverage of $189,600.

“The dollar amount of insurance that people need depends entirely on their personal situations – if they’re married, if they have kids, if they’re single, if they have coverage through work and so on,” said Rocco Casullo, head of direct to consumer insurance at BMO Insurance.

Not surprisingly, the survey respondents who are married or common law with children indicated that they feel they need more life insurance coverage than other Canadians, at an average level of $320,974. Those who are married or common law without children said they need average coverage of $290,962.

Single individuals without children said they need an average of $186,629, and single individuals with children said they need an average of $106,517.

The amount of coverage that Canadians feel they need varies significantly by province. Ontario residents feel that they need the highest level of coverage, at an average of $418,879, followed by B.C. residents, at $298,177. Quebec residents believe they need the least amount of coverage, at $93,188, on average.

The survey also revealed that many Canadians have insufficient insurance coverage on the health side, with only 16% of respondents indicating they have purchased all of life, critical illness and disability insurance.

That’s despite the fact that 65% of those surveyed said they believe that developing a critical illness or becoming disabled as a result of an accident would have a significant financial impact on their or their family’s standard of living. Furthermore, more than half said they believe it would take fewer than six months for them to start feeling financially strained if they became seriously ill or were disabled, and more than a third said they would feel financially strained in fewer than three months.

“These types of unexpected events can put a tremendous amount of financial stress on both the affected individuals and their families,” said Casullo. “While many people tend to focus on making sure that their family is supported financially if they were to die, it’s also important to take into account that illnesses and accidents can happen as well.”

When asked why they have not bought all three types of insurance, the top reasons Canadians identified were:

  • It is too expensive (38%)
  • I am in good health (27%)
  • I feel that I already have enough coverage through work (26%)